Google AdSense Alternatives: Facebook Ads?

This is going to be more of a hypothetical post, but it’s something that I really believe will be a reality before long.

No online “empire” has penetrated the average web user’s home like Google, and it only makes sense to look at a online business just as popular to find out who could be the next big player in the ad publishing world – Facebook.

This isn’t all conjecture on my part – there are some real signs that point to Facebook becoming the next big online advertising giant, which I’ll of course explain further…

Facebook is Already an Advertising Machine

For starters, let’s look at the fact that Facebook already is highly driven by its own advertising platform, which takes into account every last detail about you, and tailors the ads you see to those details.  Talk about highly targeted advertising.

As an accountant, I like to first dive into the company’s financials – as you can see below, advertising makes up a significant portion of Facebook’s revenue (as of the end of 2011). This data was taken straight from their registration statement for when they went public earlier this year.

Also, this paragraph was taken straight from the same registration statement (see the bold text):

We generate a substantial majority of our revenue from advertising. The loss of advertisers, or reduction in spending by advertisers with Facebook, could seriously harm our business.

 The substantial majority of our revenue is currently generated from third parties advertising on Facebook. In 2009, 2010, and 2011, advertising accounted for 98%, 95%, and 85%, respectively, of our revenue. As is common in the industry, our advertisers typically do not have long-term advertising commitments with us. Many of our advertisers spend only a relatively small portion of their overall advertising budget with us. In addition, advertisers may view some of our products, such as sponsored stories and ads with social context, as experimental and unproven. Advertisers will not continue to do business with us, or they will reduce the prices they are willing to pay to advertise with us, if we do not deliver ads and other commercial content in an effective manner, or if they do not believe that their investment in advertising with us will generate a competitive return relative to other alternatives. 

Although you could look at it and say that Facebook needs to diversify, it’s clear that their most powerful weapon is the database of millions of people around the world – data that can be used to make advertisements more effective.  No other company (not even Google) has access to this depth of information.  It makes sense that Facebook will continue to leverage the power of its ad publishing.

The Next Logical Step: Ads on YOUR Website

Facebook’s ad publishing is obviously a huge source of revenue for the social networking company, however when you stop to think that this is all a result of only page views on Facebook, it almost blows your mind to think about the kind of revenue they would be generating by having their ads on other websites.

It’s Already Happening (to a Limited Extent)

As pointed out by this TechCrunch article, Facebook is already testing ads outside of the Facebook platform.  As you can probably guess, they’re testing it with Zynga, a company with whom they have a strong partnership.

And yes, this TechCrunch article refers to Facebook as a potentialAdSense Killer“.  I like the sound of that, don’t you?

If you go to Zynga and are logged into your Facebook account, here’s what you might see (these are the ads that I see):

Here’s How I Think it Would Work

I actually think these ads could be the best thing to happen to internet marketers who rely on displaying ads for earnings on their websites.  Think about it: You’d have extremely targeted ads with the familiar/friendly Facebook formatting that people aren’t blind to (in the way they might be blind to Google AdSense ads).

Now, Facebook isn’t going to just run wild with this – I’m assuming that you not only would need to be logged into Facebook, but would also need to opt into sharing your information with outside websites (or not opt-out of it).  This is obviously the right thing to do from a privacy standpoint, even though it reduces the effectiveness of the ads.

Even if you’re not logged in or you opt-out of sharing information, I see no reason why Facebook couldn’t or wouldn’t create a back-up ad system that bases the ads on the content of the page much like Google does with AdSense.  This would be a pretty logical move.

Not only do I think these ads would have a higher click through rate, but I also think they would have a pretty high earnings per click.  All you have to do is think about it from an advertiser’s perspective – Facebook is a great place to advertise (just as good or maybe better than Google), so I imagine the earnings would follow.  The unknown factor would be how much of the earnings Facebook would be willing to share with its publishers.

It’s important to note that I don’t think Facebook is going to roll this out to the general public anytime soon.  They will most likely start with a handful of trusted sites (like Zynga and other sites where they may have partnerships) before they consider allowing other sites to publish ads.

There are a lot of other important questions:  How picky will they be with approving ad publisher accounts? Will you need to get approval for each URL that displays ads (similar to Media.net)?  No one knows right now, and all of these variables will determine whether or not Facebook can truly become an AdSense-killer.

What Do You Think?

It’s exciting to think about this possibility, especially for those of us who were banned from AdSense.  Facebook is in a unique position to really be able to compete with AdSense/Adwords – and if this does eventually happen, there’s no doubt that Google will need to react, to stay competitive.  That can only be a good thing for us (hopefully).

Let me know what you think in the comments!

 

Twitter Digg Delicious Stumbleupon Technorati Facebook Email
Connect with Eric Gati on Google+.

30 Responses to “Google AdSense Alternatives: Facebook Ads?”

  1. I think it’s a really cool idea and hope it takes off. Making Google sweat a little is definitely a good thing!

    [Reply]

    Eric G. Reply:

    I agree, Dan! Even though it may be awhile before this becomes a reality, I’m definitely excited about it.

    [Reply]

  2. Aren’t people going to get tired of the same ads? Personally I think Adsense has a huge rate of ad blindness because people are so familiar with seeing it they ignore it immediately.

    Same may hold true for Facebook, but I guess we get to test it out soon enough. I’m more of an affiliate guy anyway.

    [Reply]

    Eric G. Reply:

    You are right about the ad blindness, but I constantly remind myself of this one fact: Despite how prevalent Google AdSense ads are, people still click on them. They still outperform most types of ads in most niches.

    Placement makes a big difference too – I’m much more blind to a sidebar ad than I am with an ad found within the content.

    Facebook, if they do come out with a widespread ad publishing network, will probably be the same way. However, while it’s new, I think a lot of people won’t be blind to them (which may lead to a much higher CTR).

    [Reply]

  3. I think this will be great. It is about time that somebody puts something out there that has the potential to rival Adsense. Google will have no choice but to loosen up and stop banning people like you who didn’t do anything wrong.

    Great post.

    ~ Adam
    Adam recently posted… Warren Buffet Network Marketing Tips

    [Reply]

    Eric G. Reply:

    Thanks for the comment Adam – Competition for Google HAS to be a good thing…and while it won’t get my account unbanned, they may think twice before mass-banning accounts with little reason (in the future).

    [Reply]

  4. i like the hypothetical scenario…

    Facebook is particularly effective (stealing big market share from G) is because of their ability to precision target based on social/personal attributes.

    those won’t be readily available when a publisher like us displays those ads.

    another thing to consider….

    many FB ads do well because they are presented when we have our guards down the most (minds are in social space).

    do you feel publishers will experience the same CTR percentages when ads are displayed on their websites and blogs?

    the only reason G isn’t able to combat FB right now is because they took their time entering the social space. imagine – what if G+ was to enter the space before FB?

    certainly an interesting discussion. let’s see how it evolves :)
    Sunil l Expediting Wealth Through Extra Income recently posted… $5,963.41 – My Biggest Google Adsense Earning Check + State of Niche Websites

    [Reply]

    Eric G. Reply:

    Great points, Sunil. I do think that when you remove the social aspect from Facebook’s ads (and the ability to target based on the data in your Facebook profile), the ads probably become much less effective.

    Be that as it may, they can still offer a the “familiar” Facebook styling (with thumbnail image) that may have a higher click-through rate (who knows). They could probably still implement some social features, especially with ads for Facebook pages (i.e. “3,014 people like this”).

    And again, there would theoretically be a % of people who don’t opt-out and who remain logged into Facebook, who potentially WILL see ads targeted to them. I have to believe these ads will have a higher CTR.

    Again, this is all conjecture…all I know is that if any company is in a position to steal a large part of web advertising space from Google, it’s Facebook.

    [Reply]

  5. It is a win situation for FB, more eye-balls on their ads, more revenue.

    FB Ads format is a little attractive comparing to Adsense (Text Only or Image one.)

    However, the CPC (as a content publisher) may not that high comparing to Adsense payout.

    FB Ads are “more social” targets in my opinion, I don’t know how it could work out on content niche sites unless your visitors let FB access their social profile and pull out more related ads -> More CTR?

    I hope it’s available in a few months and we could check it out. :)
    Kent @ Niche Site Profit recently posted… I am in 30 Day Challenge (Day 1)

    [Reply]

    Eric G. Reply:

    Great points, Kent, thanks for the comment. See my response to Sunil above, where I addressed my thoughts on CTR and how the ads might function (that is, my opinion about how they might function).

    [Reply]

  6. I really hope that this is true and that FB is really going to do this in the near future! Would make great business sense for them and would open a TON of doors for internet marketers to make money and hopefully put some pressure on the AdSense team to stop banning publishers who haven’t done anything wrong ;)

    Thomas
    Thomas @ Mobile App Tycoon recently posted… How to Come Up With KILLER App Ideas Series – Part 5 – Using Concepts of Existing Games

    [Reply]

    Eric G. Reply:

    I totally agree, Thomas. Being able to publish Facebook ads on our own sites would likely be a great new stream of revenue.

    [Reply]

  7. Well I think it’s about time that Google got some proper competition on this. I know that there are other CPC networks out there, but let’s face it… The big G was the 1000 pound Gorilla.

    The fact that most users are logged into Facebook all the time, makes it possible to display super targeted ads even outside Facebook. That’s something that should make Google shake a little in the pants :)
    Rasmus @ Retire My Ass recently posted… The Autopilot Money Mindset

    [Reply]

    Eric G. Reply:

    Absolutely – In the PPC space, it really seems like Facebook is the only company really equipped to compete with Google.

    [Reply]

  8. Hello Eric,

    Really enjoying the series an Adsense alternatives.
    The company I work my day job for has recently put a lot of facebook integration onto their website. There has been a real upturn in sales and discussion about the brand. Much more so then any adsense campaign they did.

    [Reply]

    Eric G. Reply:

    Thanks for the comment, Stuart. That’s good to see your company is doing well with Facebook ads – I’ve heard similar things from other people. Being able to REALLY target ads to specific demographics tends to make the ads a lot more effective (but perhaps more expensive). I can certainly see how it would perform better than AdSense ad campaigns.

    [Reply]

  9. Very nice article… Actually I got a confirmation from adsense that my account is banned. So I am looking an alternatives (best) for adsense), bye bye adsense.
    walt recently posted… 15 Good Habits of Highly Successful People

    [Reply]

    Eric G. Reply:

    Sorry to hear about that Walt (and welcome to the club). Unfortunately, I’ve found that none of the current AdSense alternatives performs nearly as well as AdSense, but hopefully Facebook will change that.

    [Reply]

    Walt Reply:

    Thank you Eric for your reply. Yeah hopefully facebook can provide us better option
    Walt recently posted… Comment on Top Ten Best Personal Finance Books to Become Financially Successful by Wealth Desire

    [Reply]

  10. I can’t wait to remove AdSense from my sites and put Facebook ads! Hopefully they pay as well. I’m also waiting for BING to offer an Adsense alternative. Why is it taking so much time?

    Arnaud
    Arnaud recently posted… Fastest method to setup your new domain names: DNS + cPanel + WordPress with Themes & Plugins

    [Reply]

    Eric G. Reply:

    I feel the same way, Arnaud. I’m not sure why it has taken this long, but I suspect setting up a global ad publishing system is more complicated than we understand.

    [Reply]

  11. As a blogger, I find some fun in the fact that facebook is becoming a threat to Google adsense. I can’t wait for Google to react in a way that will favor us.
    Carl recently posted… kimkardashiantaped.com

    [Reply]

    Eric G. Reply:

    Me too, Carl. Thanks for the comment!

    [Reply]

  12. Don’t count Google out. I feel they are waiting to see how Facebook ads take off or not. I personally do not like all the ads, and I know of many others that feel a bit annoyed already. However, I know how important they are to any platform.

    Google will come back and reform Adsense, I just have a feeling that will happen and it will be bigger and better than Facebook.

    Its the competition that keeps social media very interesting these days and hopefully will maintain a good positive experience for the user.
    Lynn Brown recently posted… Social Media Strategies That Work

    [Reply]

  13. Google give ads and earn more and more from these ads.As Facebook is best place of interaction and for publicity as a large number of people gather here and share their information. So advertising through Facebook is superb idea.
    ayesha recently posted… How to Implement Automatic Scrollbar Moving

    [Reply]

  14. what a good news for us. if FB will compete against google in terms of ads, then Google Adsense might change their protocol in banning accounts. it might become easier for me to reapply for adsense
    marilyn cada recently posted… My Top Five Sites for Free Images

    [Reply]

  15. It would be great to have a better alternative and it seems like Facebook will be able to provide that.
    Adam recently posted… 8 Tips to Prepare for a Hurricane with your Pets

    [Reply]

  16. Hi Eric,

    Alternatives are good , but at the end of the day no one pays like Google Adsense. And many of these alternatives look pretty spammy when you implement them on your website and you might get many unrelated ads on your website.

    Regards
    Sara Fargoons

    [Reply]

    Eric G. Reply:

    I agree, Sara, but unfortunately it’s all you have if you can’t use AdSense. :)

    [Reply]

  17. Hi Eric,

    Its good news to know. More competition means more options for publishers. I was rejected for Adsense for almost three times now.

    Google might relax its rules and at the same time, the approval process for Facebook Ads will be easier initially. Every one can take advantage of this.

    Regards,
    Satya Sirisha.
    Satya Srinivas recently posted… Know your Android Phone Better with CPU-Z for Android

    [Reply]

Leave a Reply

*

CommentLuv badge

Subscribe to my awesome newsletter and receive The Ultimate Backlink Tracker for free! (Don't worry, I'll respect your privacy.)



The owner of this website, Eric, is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking http://www.my4hrworkweek.com to Amazon properties including, but not limited to, amazon.com, endless.com, myhabit.com, smallparts.com, or amazonwireless.com.

Loading...
Get my blog posts delivered straight to your e-mail >>
(I'll respect your privacy, don't worry.)